SOURCE:

Faculty: Management Sciences
Department: Banking And Finance

CONTRIBUTORS:

Okoye, N. J.
Ibenta, S. N.
Ezu, G.

ABSTRACT:

The research work examined the effect of bank capitalisation reforms on financial performance of deposit money banks in Nigeria over a period of eighteen years (1999-2016). The main problem that led to the study is that proponents of banking sector reforms believe that increase in the size of reforms could potentially increase bank return and financial performance while opponents argue that banking sector reforms could increase banks exposure to risk. The main objective of the study is to evaluate the effect of banking sector reforms on financial performance of deposit money banks in Nigeria. The specific objectives is to: evaluate the effect of minimum capital requirement on the profit before tax of the Nigerian deposit money Banks. Assess the effect of minimum capital requirement on net interest income of the Nigeria deposit money Bank. Determine the effect of minimum capital requirement on return on equity of Nigeria Deposit Money Banks. This research is anchored on supply leading theory of finance. Data were gotten from CBN and NDIC reports. The data collected were analysed using ordinary least square (OLS) regression techniques. E-view statistical tool was employed to run the regression. The findings revealed among other things that banking sector reforms had insignificant and positive effect on profit before tax of Nigeria deposit money banks as well as that banking sector reforms had insignificant effect and negative on net interest income of Nigeria deposit money bank. It is equally discovered that banking sector reforms has insignificant and positive effect on return on equity of Nigeria deposit money banks. Based on the findings, it was recommended among other things that banks should have strong capital base as evidence of strength and as a tool for operating profitability so that as the confidence of the depositors in the banking system increase they will make more deposit which will enhance the profitability of the entire sector. Also, there should be adequate supervision by the monetary authorities such as CBN and NDIC on Nigeria deposit money banks. This will enhance efficiency and stability in the system and also bring great consolidation to deposit money banks in Nigeria.